Abstract
IT portfolio management and the related planning decisions for IT–dependent initiatives are critical to organizational performance. Building on the logic of appropriateness theoretical framework, we define an important characteristic of decision rules used during IT portfolio planning; rule appropriateness with regards to the risk-taking criterion. We propose that rule appropriateness will be an important factor explaining the evolution of rules over time. Using an inductive learning methodology, we analyze a unique dataset of actual IT portfolio planning decisions spanning two consecutive years within one organization. We present systematic comparative analysis of the evolution of rules used in planning over two years to validate our research proposition. We find that rules that were inappropriate in the first year are being redefined to design appropriate rules for use in the second year. Our work provides empirical evidence demonstrating organizational learning and improvements in IT portfolio planning capabilities.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Boynton, A.C., Zmud, R.W.: Information Technology Planning in the 1990’s: Directions for Practice and Research. MIS Quarterly 11(1), 59–71 (1987)
Broadbent, M., Weill, P., Clair, D.S., Kearney, A.T.: Implications of Information Technology Infrastructure for Business Process Redesign. MIS Quarterly 23(2), 159–182 (1999)
Eisenhardt, K.M.: Control: Organizational and Economic Approaches. Management Science 31(2), 134–149 (1985)
Gentry, J.A., Shaw, M.J., Tessmer, A.C., Whitford, D.T.: Using Inductive Learning to Predict Bankruptcy. Journal of Organizational Computing & Electronic Commerce 12(1), 39–57 (2002)
Heugens, P., van Riel, C., van den Bosch, F.: Reputation Management Capabilities as Decision Rules. Journal of Management Studies 41(8), 1349–1377 (2004)
Jeffery, M., Leliveld, I.: Best Practices in IT Portfolio Management. MIT Sloan Management Review 45(3), 41–49 (2004)
Lambert, R.A.: Executive effort and selection of risky projects. RAND Journal of Economics 17(1), 77–88 (1986)
Lederer, A.L., Sethi, V.: The Implementation of Strategic Information Systems Planning Methodologies. MIS Quarterly 12(3), 445–461 (1988)
Levitt, B., March, J.G.: Organizational learning. Annual Review of Sociology 14, 319–340 (1988)
Luce, R.D., Raiffa, H.: Games and decisions: Introduction and critical survey. Wiley, New York (1957)
McAfee, A.: Mastering the Three Worlds of Information Technology. Harvard Business Review 85(2), 141–149 (2007)
March, J.: A primer on decision-making: How decisions happen. Free Press, New York (1994)
March, J.G., Shapira, Z.: Managerial Perspectives on Risk and Risk Taking. Management Science 33(11), 1404–1418 (1987)
March, J.G., Simon, H.A.: Organizations. Blackwell Publishers, New York (1958)
Maizlish, B., Handler, R.: IT Portfolio Management: Unlocking the Business Value of Technology. John Wiley and Sons, Hoboken (2005)
McFarlan, F.W.: Portfolio approach to information systems. Harvard Business Review 59(5), 142–150 (1981)
Miles, R., Snow, C.: Organizational Strategy, Structure and Process. McGraw-Hill, New York (1978)
Piccoli, G., Ives, B.: IT-Dependent Strategic Initiatives and Sustained Competitive Advantage: A Review and Synthesis of the Literature. MIS Quarterly 29(4), 747–776 (2005)
Quinlan, J.R.: Induction of decision trees. Machine Learning 1(1), 81–106 (1986)
Quinlan, J.R.: Decision trees and decision-making. IEEE Transactions on Systems, Man, and Cybernetics 20, 339–346 (1990)
Sabherwal, R., Chan, Y.E.: Alignment between Business and IS Strategies: A Study of Prospectors, Analyzers, and Defenders. Information Systems Research 12(1), 11–33 (2001)
Shaw, M.J., Gentry, J.A.: Using an Expert System with Inductive Learning to Evaluate Business Loans. FM: The Journal of the Financial Management Association 17(3), 45–56 (1988)
Shaw, M.J., Gentry, J.A.: Inductive learning for risk classification. IEEE Expert, 47–53 (1990)
Simon, H.A.: A Behavioral Model of Rational Choice. Quarterly Journal of Economics 69(1), 99–118 (1995)
Tessmer, A.C., Shaw, M.J., Gentry, J.A.: Inductive Learning for International Financial Analysis: A Layered Approach. Journal of Management Information Systems 9(4), 17–37 (1993)
Tsoukas, H.: Firm as a Distributed Knowledge System: A Constructionist Approach. Strategic Management Journal 17, 11–25 (1996)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2009 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Karhade, P.P., Shaw, M.J., Subramanyam, R. (2009). Evolution of Decision Rules Used for IT Portfolio Management: An Inductive Approach. In: Nelson, M.L., Shaw, M.J., Strader, T.J. (eds) Value Creation in E-Business Management. AMCIS 2009. Lecture Notes in Business Information Processing, vol 36. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-03132-8_25
Download citation
DOI: https://doi.org/10.1007/978-3-642-03132-8_25
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-03131-1
Online ISBN: 978-3-642-03132-8
eBook Packages: Computer ScienceComputer Science (R0)